TMI Blog2023 (9) TMI 522X X X X Extracts X X X X X X X X Extracts X X X X ..... the issue in the present case is no longer res-integra. Hence, no further discussion is warranted to decide this appeal. The impugned order is set aside. Appeals are allowed. - MR. RAMESH NAIR , MEMBER (JUDICIAL) AND MR. C L MAHAR, MEMBER (TECHNICAL) Shri Amal Dave, Advocate for the Appellant Shri, P Ganesan, Superintendent(AR)for the Respondent ORDER The issue involved in the present case is that whether the appellant is liable to pay Service Tax on computer to computer linkage charges, while acting as a Stock Broking Company. 2. Shri Amal Dave, Learned Counsel appearing on behalf of the appellant at the outset submits that the very same issue in the appellant s own case has been decided by this Tribunal in their favour vide final order No. A/12224/2022 dated 21.12.2022. Therefore, the issue is no longer res-integra. He prays that following this Tribunal s decision in appellant own case, the impugned order in present be set aside. He also placed reliance on the following Judgments: Edelweiss Financial Advisors Ltd. V/s CCE ST, Ahd. 2022(12) TMI 975-CESTAT Ahmedabad Anagram Stock Broking Ltd. V/s. CST,Ahd 2018 (10) TMI 641- CESTAT Ahmed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... question of law involved in the present appeals is to be addressed is: whether the appellants-stock brokers are required to include NSE/BSE transaction charges, SEBI turnover fees, Stamp duty, Depository/Demat charges and Security Transaction charges in the value of brokerage and commission charges recovered from their customers/clients. The contention of the Advocates for the respective appellants is that these charges are collected separately and in accordance with various statutory Bodies Regulations and not retained by the stock brokers but deposited with the authorities concerned viz., Stock Exchanges, hence, such charges cannot form part of the taxable value as alleged by the Dept. The determination of the aforesaid question should not the same has been considered by way of judgments including M/s LSE Securities Ltd (supra); 12.1 Matters before us fall within the periods before 2001 and after 2001 but before 2004. When service tax was introduced in the year 1994 to tax the service provided to investors by stock brokers in connection with sale or purchase of securities listed on a recognized stock exchange, Legislature, up to the year 2001 intended that aggregate of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... force till 15-7- 2001 underwent amendment by Finance Act, 2001. The amending Act replaced Section 67 by Finance Act, 2001, prescribing levy of tax on the gross amount charged by service provider (stock broker) for the taxable service provided by him. Such aggregate charge was gross value. An explanation appeared in the amended section declaring that value of taxable service as the case may be shall include certain receipts prescribed by different clauses appearing under Section 67. Clause (a) is the relevant clause insofar as that relates to taxable service provided by stock broker and that is under consideration in these appeals. That clause states that aggregate of commission or brokerage charged by a broker on the sale or purchase of securities including the commission or brokerage paid by the stock broker to any sub-broker shall be liable to service tax. Thus, there is no extended meaning of measure of levy even by amended definition of valuation of taxable service. 12.5 Provision of Section 67 provides the basis to determine the value of taxable service. No ambiguity persists in Section 67 of the Act. No receipt other than commission or brokerage made by a stock broker i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... only liable to tax by express provision of law. Any other exercise of authority beyond that shall make that fatal. 15. The correct assessable value of taxable service usually is the intrinsic value of the service provided since service commands that value only and that should only be taxed without any hypothetical rule of computation of value of taxable service under Section 67 of the Act. The other receipts a stock broker makes are irrelevant for determination of the assessable value of taxable service provided by him. Thus the test is whether a receipt of stock broker is in the nature or commission or brokerage to levy service tax. Burden of proof failed to be discharged by Revenue to bring the receipts to charge. 16. The appellants in these appeals received turnover charges, stamp duty, BSE charges, SEBI fees and DEMAT charges contending that the same was payable to different authorities and claimed that the same is not taxable. But Revenue taxed the same on the ground that such receipt by stock broker was liable to tax. Revenue failed to bring out whether the turnover charges and other charges in dispute in these appeals received by appellant were commission or broke ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Service (BAS), which is beyond the show cause notice. This fact has not been rebutted by the Ld. A.R. On this ground alone, the demand of service tax under this head is liable to be set aside in these appeals. On merits also, we find that the legal position on this issue is already settled as the demand was raised by the department only on the basis of the Circular No. 66/15/2003- ST dt. 05.11.2003. 9 ST/69/2009, ST/166/2010, ST/494, 765, 771/2011 However, the said circular has been quashed by the Hon ble High Court of Andhra Pradesh in the case of Karvy Securities Limited (supra). The said judgment has been affirmed by Hon ble Supreme Court as reported in 2015 (39) STR 705 (SC). The above judgment of Hon ble High Court of Andhra Pradesh has been followed by this Tribunal in the case of CST, Delhi vs. ABN Amro Bank (supra), wherein this Tribunal has held as under: 3. The respondent is engaged in the mobilising, selling, recommending mutual fund units of various mutual fund houses and also in selling, mobilising recommending investments in bonds issued by banking and non-banking companies. These activities were clarified to be falling under the category of Business Auxiliary ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... behalf of the Government of India to manage the Indian economy which its constitutional responsibility. Therefore, the lending or borrowing of money by the Government is a sovereign function and on such functions there cannot be any tax liability whether by way of direct tax or by way of indirect tax. This is the principle followed by this Tribunal in the case of HDFC Bank and Canara Bank case (supra) 5. In view of the above, the impugned demands are clearly unsustainable in law. Accordingly, we set aside the same and allow the appeals with consequential relief, if any, in accordance with the law. The ratio of the judgment of this Tribunal in the case HDFC Bank Ltd (supra) is reproduced below: 4.1 As per Notification dated 13-3-2003 issued by the Government, the tax savings bonds have been issued as part of the borrowing programme of the Government from the public. As per the clarification issued by the RBI videletter dated 28-10-2004, copy of which is available on record, the said bonds issued under Section 2(2) of Public Debt Act, 1944, constitute a Government security and the bonds were issued by the Government for raising a public loan. Therefore, these is no d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssioner (Appeals) upheld the service tax demand on CTCL Charges and income from public issues/RBI bonds along with pro rata penalty under Section 78 ibid. However, demand on commission on distribution of mutual funds was dropped. Since we have already set aside the demand of service tax pertaining to CTCL charges and income from public issues/RBI bonds emanating from the Order-in-Original dt. 21.07.2009, the imposition of penalty under Section 76 in relation to the same Order-in-Original dt. 21.07.2009 is therefore not sustainable and is therefore set aside. 8. In view of the foregoing, impugned orders are not sustainable and the same are set aside. 9. In the result, the appeals are allowed. 5. In view of the above decision, the issue in hand is no longer res-integra. Accordingly, following the above Tribunal decision the impugned order is set-aside and the appeal is allowed. From the above decision in the appellant s own case, the issue in the present case is no longer res-integra. Hence, no further discussion is warranted to decide this appeal. 5. Accordingly, following the above Tribunal s order, we are of the view that the demand in the present case is n ..... X X X X Extracts X X X X X X X X Extracts X X X X
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